digital money minting masterclass · 2021. 6. 30. · contined on net age — digital money minting...

Digital Money Minting Masterclass

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30/06/2021

Advice in Frontier Tech Investor does not constitute a personal recommendation. Any recommendation should be considered in relation to your own circumstances. Before investing you should consider carefully the risks involved, including those described below. If you have any doubt as to suitability or taxation implications, seek independent financial advice.

Before investing you should consider carefully the risks involved, including those described below. If you have any doubt as to suitability or the taxation implications, seek independent financial advice.

General - Your capital is at risk when you invest in cryptocurrency - you can lose some or all of your money, so never risk more than you can afford to lose. Past performance and forecasts are not reliable indicators of future results. Commissions, fees and other charges can reduce returns from investments.

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Digital Money Minting Masterclass

By Sam Volkering, Editor, Frontier Tech Investor

You’re about to get some truly privileged information. Something that most crypto investors still don’t know about or understand well enough to get working.

What you’re about to find out from me on this strategy is what it’s all about, what it means, how you can take advantage of it and what the potential upside is to successfully implement it with your crypto investing.

But before I deep-dive into it, what you also need to understand is that this strategy isn’t something to just leap blindly into.

You shouldn’t just leap into every crypto that offers up the opportunity to implement this strategy. If you blindly try and enact this yourself, you may find yourself in a pot of boiling water, fast.

You see while this strategy can be applied across a number of different crypto, each one is different as to how it applies compared to another.

For example, let’s say you’ve followed all my steps I take you through with Crypto A to take advantage of the strategy. And it starts delivering the crypto minting “payouts” for you as expected.

That doesn’t mean you can then go and take those same steps with Crypto B and expect to achieve the same result. In fact, I’ve not yet come across a crypto that you can deploy this strategy with where the steps needed to maximise its potential are exactly the same as another.

That also means that you really do need to have a solid foundation of understanding about all things crypto related, from how they work to why they work to how to get tokens, how to store them safely and how to transact on different blockchains and do so with the highest level of confidence.

What you’re going to see now is that level of foundational knowledge needed to get you prepped for the implementation of this strategy.

Again, to emphasise the point, don’t just go out blindly trying to put this strategy into play without the right level of knowledge, guidance and information, every crypto is different in this approach and you should make sure that you understand the risks involved in it too before jumping in.

The GHOST Stake

First off when it comes to the steps needed to mint and stake crypto in the right way there’s a process I use and have conveniently called the GHOST Staking Strategy.



GHOST, of course, is an acronym. It details the steps you need to take in order to easily take advantage of the strategy.

• Get your crypto required to stake and send it to the relevant wallet

• Hold your crypto in the relevant wallet (there’s no need to send them anywhere else)

• Open your selected staking service within the relevant wallet

• Stake your crypto to your chosen staking service

• Take it easy, sit back, relax and watch your staking payouts roll in

That’s how easy it can be to stake a crypto, when you know how (which is why you are reading this!).

But of course these kinds of terminologies, stake, wallet, minting, staking service, validator, payouts, cycles, etc. can be a little daunting.

Understanding the background is as important as knowing how to take advantage of this process, so let’s wind back a moment and look at what staking really is.

What it means to “stake”

When bitcoin was created the underlying mechanics of it required the participants on the network, the nodes to undertake a process known as “mining”.

This was related to the consensus algorithm that bitcoin uses known as the “proof-of work” (PoW).

This in laymen terms means that you can take a fast, powerful computer and tell it to solve a very difficult, specific mathematical problem in order to add a block to bitcoin’s blockchain.

If you’re the first one to solve this algorithm then your block is added to the bitcoin blockchain and you get a reward for solving the algorithm in the form of BTC.

Now, early on this BTC reward was 50 bitcoin. Then after 210,000 blocks were “mined”, that reward dropped to 25 BTC. And every 210,000 blocks after, the rewards halves again.

Then after 210,000 blocks were “mined”, that reward dropped to 25 BTC. And every 210,000 blocks after, the rewards halves again.

Nonetheless, the key concept here is that you need powerful hardware running nonstop consuming energy and time resources in order to contribute to the bitcoin blockchain.

The “work” of the computers on the network in securing is the proof that’s used to confirm its existence and ongoing function.



This is “proof-of-work”.

Now, with PoW one of the downsides is that not everyone really has an opportunity to solve this algorithm and get BTC rewards.

The competition to solve the algorithm is high and those with the most powerful fast computers have an advantage. Today the average person simply doesn’t have the resources or hardware to compete on a level playing field.

So your chances of mining bitcoin today are pretty remote.

However, PoW isn’t the only consensus algorithm that blockchains can use to secure and to maintain their blockchains.

Another is known as “proof-of-stake”(PoS).

In PoS, miners win rewards for the generation of new blocks. With PoS “validators” are rewarded not based on the hardware they bring to the table, but their economic “stake” in the network.

Where a supercomputer mining rig has an increased chance of generating a block in

PoW because of its immense processing power, in PoS the validator with larger stakes (or holdings) of that particular token have an increased chance of generating a block and reaping the token reward.

In that sense with PoW you don’t need a massive warehouse full of expensive, power hungry mining rigs. You really only need one reliable computer that can continue to run the core code properly and you need a big old stake of that blockchain’s crypto.

PoS as a consensus algorithm somewhat evens out the playing field for everyone to potentially benefit from the block generation rewards.

Now that also comes with the caveat that it’s not easy to get a significant amount of “stake” to become a validator on a particular blockchain.

So in that sense you can’t just have 1 token for a PoS crypto and expect to get validator block rewards. Realistically a validator with 1 million of them has a higher probability.

Now that raises the question that perhaps “whales” in certain PoS projects have an advantage and could in fact manipulate a crypto PoS system in a way that only benefits them.

And that’s true of some crypto – which is why it’s very important to not just blindly go off chasing stakes in any old PoS crypto.

With certain projects even if you don’t have enough crypto to become a validator on their blockchain, you can still direct your holdings to other validators as part of their collective “pool”.



Now, in doing that you’re effectively joining others in a group to enable that validator to have larger economic stake and a better chance of generating a block and getting a reward. In getting a reward that validator then passes on the reward to those who have directed (staked) their crypto to them (usually minus a small fee).

For example, I might hold 5,000 Crypto A, but I really need 20,000 Crypto A to become a validator in a particular PoS system. Even then I need to run a computer 24 hours a day, 7 days a week all the time to ensure I’m doing my job on the network as a validator. It’s all too much!

Instead I can direct my 5,000 Crypto A to Validator X and let them do the validating. In turn they payout the rewards to me proportionally based on who else might be staking with them (less their fee for operating the hardware and software needed to be a good validator).

For me, all I have to do is a few simple steps in my Crypto A wallet and I can point my crypto to that validator and then just wait as my proportion of the block rewards start to roll in.

These minting payouts once you’ve properly set up your crypto stake to a validator are easy to maintain, because you effectively don’t need to do anything else.

In a number of examples where you can stake crypto, you can receive these minting payouts in a matter of hours, sometimes a few days, and then often the next reward cycle based on your new holding of tokens.

In effect this means you’re compounding these minting payouts every hour or few days, depending on which crypto you’re using in this strategy.

Some people call this “crypto income” – as you’re getting constant crypto as a reward for your participation in the network.

Some call them “crypto dividends” and there are similarities, but these aren’t profits from the blockchain, they’re rewards for helping to create and secure and maintain the crypto’s blockchain.

They are something really unique as they are new crypto tokens you receive, yes. But the only fiat-converted value is determined should you decide to sell them into fiat money, which isn’t really the point of it all – but to build your holdings long term in crypto and to use crypto as a medium of exchange, not the broken, fragmented legacy financial system.

What’s so exciting about this crypto minting strategy is it’s actually quite easy.

You find the right crypto that has a PoS consensus, then you get your own allocation of crypto needed to stake. You stake them in the right way to a validator on the network, then you just sit back and watch the crypto payouts roll into your wallet.

Do it once, and you’ll see how easy it can be.



I will give you a real example here because it’s easiest to understand with an example, and I’ll do it with Tezos [XTZ].

Tobeclear,thisisjustanexample–notarecommendation.

Tezos is a crypto where you can stake your crypto and get these crypto payouts in XTZ tokens.

For example, in Tezos, staking (they call it baking) XTZ tokens you “point” your XTZ tokens to a particular “baker” which is a service of a large pool of other holders who are also staking (baking).

This “baker” helps to perform the computational requirements for the Tezos blockchain, the XTZ rewards are paid out to the baker who pays them out proportionally to the token holders who have also “pointed” their tokens properly to that baker.

With Tezos, these payouts come at roughly three-day intervals which are then sent either to your baker for you to withdraw from, or most commonly to your Tezos wallet directly from your baker.

In this example, Tezos payouts compound every three days.

At the moment when I talk about these payouts, there’s a calculable return on staking your Tezos XTZ tokens.

At the time of writing this report its approximately 6% per annum in token rewards, minus a validator’s fee.

That means if you’re delegating 1,000 tokens to a baker, you could roughly expect around 60 XTZ per year as your slice of the reward.

Of course there’s risk involved here which I’ll get to, but then there’s also the potential that your crypto payouts will supercharge your crypto investment holdings.

Let’s say you’ve got 1,000 XTZ as an example, and you’ve successfully pointed them to a baker and you’re getting about 0.5 XTZ every three days as your slice of the “baking” reward.

And let’s say XTZ has a value of US$4.20.

So, every three days for doing absolutely nothing, you’re getting the fiat-converted value of US$2.10 in baking rewards.

That’s okay. But what if over the space of the next year XTZ tokens follow the crypto cycle and skyrocket higher to a fiat-converted value of US$42. Suddenly those XTZ payouts every three days are the fiat-converted equivalent of US$21 in baking rewards.

And on an annual basis, it’s now roughly crypto minting payouts worth a fiat-converted equivalent of US$2,554.



That’s the thing with this crypto payouts strategy, when applied correctly in the right crypto with potential for that kind of long-term value you’d be crazy in my view not to seriously consider this as part of your crypto investing playbook.

Once you’ve staked your crypto correctly, you really don’t need to do much else, and can start to see those crypto payout rewards roll on in.

You don’t necessarily have to send your crypto anywhere, you can keep it all safe on your own wallet (most of the time) and you reap the benefits without having to have extensive technical competency in running software and being a validator.

I think it’s a strategy that most haven’t yet figured out how to really use and most also simply just don’t even know about yet.

That’s why in bringing you this information I am preparing you to get involved and put it into play before the masses to try and maximise your profit potential.

Risks

Of course this is crypto so there are also inherent risks here with the crypto minting payout strategy.

First is making sure to judge each potential to implement this strategy on its own merits.

Not every crypto with a PoS consensus functions the same and has the same rules for delegating and staking. That means you need to be very aware of how to stake properly and safely so that you don’t lose your initial stake and so that you’re not putting yourself in greater risk situations than is necessary.

Also while the crypto payouts are relatively consistent, you’re still exposed to the fiat converted capital value fluctuations in currency prices in the original holding and subsequent tokens you receive as your slice of the payouts.

While there’s potential to supercharge your profit potential, if the value of the token goes down rapidly, then so does the value of your original capital stake. But those payouts you were rewarded with help to mitigate that a little bit each time you receive a new payout.

Also, the variation in payouts return is based on a number of factors including the number of holders that are delegating and staking, as well as the efficiency and the success of the particular validator that you point your crypto tokens to.

Not all validators validate correctly, and some crypto has mechanisms built in to disincentivise validators that don’t do what they’re supposed to do. That means in some crypto if you’ve pointed your crypto to a validator who does the wrong thing, a portion of your crypto could be at risk.

This is why it’s vitally important to not blindly jump into any old PoS crypto expecting to simply go and stake and not be exposed to some level of third-party risk or stake risk.

There’s also risk around regulation and rules based on where you live, particularly


around tax and the treatment of these minting payouts. Some regions may determine these crypto minting payouts to be income like they would a dividend, some may determine that these payouts are a reward like a lottery return and perhaps aren’t income.

The point is that you really should get professional tax advice when undertaking this strategy to ensure that you’re compliant with the laws, rules and regulations in your particular jurisdiction.

Action to take

Staking returns can vary wildly and the risks can also vary greatly from one crypto staking system to another. Furthermore, the process is different every time for every kind of PoS crypto – so it’s important you fully understand the ins and outs of this strategy before implementing.

For now again I want to make it clear that you should absorb this information about this strategy, read up more on PoS and how it works as well as start to look at the kinds of crypto that are undertaking this kind of consensus algorithm.

But don’t wildly and blindly go trying to undertake the strategy without the proper due diligence and risk assessment and don’t do it if you’re not fully comfortable in functioning confidently in the crypto ecosystem.

Regards,

SamVolkeringEditor,Frontier Tech Investor

digital money minting masterclass · 2021. 6. 30. · contined on net age — digital money minting...

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